Previewing the final health-care bill

EJ Dionne sketches out the likely outcome of the House-Senate negotiations:

Over the past week, I've talked with key figures in the House, Senate and White House, and the outlines of a deal are becoming reasonably clear. The public option is, alas, dead. But the idea of setting up a national insurance exchange -- alongside state exchanges -- where the uninsured can buy coverage is very much alive. The House is demanding this as the price for giving up on the public plan, and a national exchange would provide for much more consumer-friendly regulation of health insurance policies.

Almost everyone in both houses wants to find ways of making insurance more affordable. Steps in this direction would include more generous subsidies for the purchase of insurance than those in the Senate bill and expanding its Medicaid provisions. The bill's price tag will grow from the Senate's $871 billion over a decade, probably to somewhere between $930 billion and $950 billion.

The tax on "Cadillac" insurance plans, opposed by both organized labor and the insurance industry, is likely to be scaled back but not eliminated. Currently, the Senate bill includes a 40 percent excise tax on high-end health insurance plans -- those at or above $23,000 for families and $8,500 for individuals.

Many opponents would settle for raising that ceiling to $28,000 for families, with a comparable increase for individuals. That would reduce the number of policyholders covered by the levy. But because of fierce resistance to the tax from a large group of House Democrats, this could prove to be one of the most vexing issues in the negotiations.

In the meantime, negotiators are looking to extend to all states a version of the special deal that saved Sen. Ben Nelson's home state of Nebraska from the bill's increased Medicaid costs. Nelson himself is pushing for this change, which would cost $25 billion to $30 billion over 10 years. One solution: somewhat more modest across-the-board Medicaid relief to all states.

This basically tracks with what I'm hearing. The Medicare Commission remains unsettled, and the way the excise tax is valued might change. In particular, it may be tied to actuarial value rather than total cost, or it may account more directly for age. The precise mix of insurance regulations might shift as well, as the House has a stronger set than the Senate does. But broadly speaking, people aren't expecting much in the way of surprises.

The excise tax on high cost health care plans has dubbed them "Cadillac" plans, a choice that was always a little puzzling. The primary demographic for Cadillacs is on Medicare, not Goldman's payroll. And one of the main targets of the tax is the union members who form a core part of the Democratic base. The notion that these people are grotesquely overpaid freeloaders is usually a Republican talking point.